The 4 Core Risk Handling Strategies in Cybersecurity and Business

What Are the Core Risk Handling Strategies?

When a risk is identified, a person or business must decide how to handle it. The four core risk
handling strategies are: avoidance, transference, mitigation, and acceptance.

Avoidance

Risk avoidance means taking actions to completely eliminate the risk.

Example: A company concerned about hurricanes may choose not to locate its headquarters in a
hurricane-prone region to avoid that risk altogether.

Transference

Transference shifts the risk to a third party, usually through a contract or insurance policy.

Example: An accounting firm purchases cyber liability insurance to cover potential financial
losses in the event of a data breach.

Mitigation

Risk mitigation involves implementing measures to reduce the likelihood or impact of a risk.

Example: A company installs antivirus software and trains employees on phishing awareness to
reduce the chance and impact of malware infections.

Understanding different hacker motivations can help in tailoring your mitigation efforts—see What Are the Three Types of Hackers?.

Acceptance

Risk acceptance means choosing not to take any action and simply accepting the potential
consequences. This is usually reserved for low-impact or low-probability risks.

Example: A small business decides not to invest in expensive flood insurance for a warehouse
located in an area with an extremely low risk of flooding.

Final Thoughts

Risk can never be fully eliminated, but it can be managed. Choosing the right strategy involves
weighing the cost of prevention or protection against the potential impact of the risk. Consider
how a risk might affect your finances, reputation, or critical operations when deciding how to
respond